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Long-Lived Assets | 12 Months Ended
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Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract] |
Long-Lived Assets | 4.Long-Lived Assets Property and Equipment. Property and equipment at December 31 consisted of the following (in thousands, except years):
|  | Useful Lives |  |  |  |  |  |  |  |  |
|  | (Years) |  |  | 2020 |  |  | 2019 |
Computer equipment |  | 3-6 |  |  | $ | 87,289 |  |  | $ | 88,701 |
Leasehold improvements |  | 5-10 |  |  |  | 25,442 |  |  |  | 25,778 |
Operating equipment |  | 3-8 |  |  |  | 67,097 |  |  |  | 59,864 |
Furniture and fixtures |  |  | 8 |  |  |  | 7,004 |  |  |  | 8,115 |
|  |  |  |  |  |  | 186,832 |  |  |  | 182,458 |
Less - accumulated depreciation |  |  |  |  |  |  | (105,073 | ) |  |  | (98,029 | )
Property and equipment, net |  |  |  |  |  | $ | 81,759 |  |  | $ | 84,429 |
Goodwill. We do not have any intangible assets with indefinite lives other than goodwill. A rollforward of goodwill for 2019 and 2020 is as follows (in thousands):
January 1, 2019 balance |  | $ | 255,816 |
Adjustments related to prior acquisitions |  |  | 640 |
Effects of changes in foreign currency exchange rates |  |  | 2,708 |
December 31, 2019 balance |  |  | 259,164 |
Tekzenit, Inc. acquisition |  |  | 9,083 |
Adjustments related to prior acquisitions |  |  | (60 | )
Effects of changes in foreign currency exchange rates |  |  | 4,135 |
December 31, 2020 balance |  | $ | 272,322 |
See Note 7 for discussion of the Tekzenit, Inc. acquisition. Other Intangible Assets. Our other intangible assets subject to ongoing amortization consist of acquired customer contracts and software. Acquired Customer Contracts. As of December 31, 2020 and 2019, the carrying values of our acquired customer contracts were as follows (in thousands):
|  | December 31, 2020 |  |  | December 31, 2019 |
|  | Gross |  |  |  |  |  |  |  |  |  |  | Gross |  |  |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Net |  |  | Carrying |  |  | Accumulated |  |  | Net |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Acquired customer contracts |  | $ | 153,790 |  |  | $ | (105,778 | ) |  | $ | 48,012 |  |  | $ | 148,872 |  |  | $ | (93,767 | ) |  | $ | 55,105 |
Acquired customer contracts as of December 31, 2020 include assets acquired in the Tekzenit, Inc. acquisition (see Note 7). The aggregate amortization related to customer contracts included in our operations for 2020, 2019, and 2018 was as follows (in thousands):
|  | 2020 |  |  | 2019 |  |  | 2018 |
Acquired customer contracts amortization (1) |  | $ | 9,963 |  |  | $ | 10,374 |  |  | $ | 7,898 |
| (1) | Acquired customer contracts represent assets acquired in our prior business acquisitions. Acquired customer contracts are amortized over their estimated useful lives ranging from three to twenty years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized, with the amortization expense included as cost of revenue in our Income Statements.
The remaining weighted-average amortization period of the acquired customer contract as of December 31, 2020 was approximately 100 months. Based on the net carrying value of these acquired customer contracts, the estimated amortization for each of the five succeeding fiscal years ending December 31 will be: 2021 – $7.2 million; 2022 – $7.0 million; 2023 – $5.8 million; 2024 – $5.6 million; and 2025 – $5.6 million. Software. Software consists of: (i) software and similar intellectual property rights from various business combinations; and (ii) internal use software. As of December 31, 2020 and 2019, the carrying values of our software assets were as follows (in thousands):
|  | 2020 |  |  | 2019 |
|  | Gross |  |  |  |  |  |  |  |  |  |  | Gross |  |  |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Net |  |  | Carrying |  |  | Accumulated |  |  | Net |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Acquired software (2) |  | $ | 75,602 |  |  | $ | (70,242 | ) |  | $ | 5,360 |  |  | $ | 75,370 |  |  | $ | (68,157 | ) |  | $ | 7,213 |
Internal use software (3) |  |  | 90,687 |  |  |  | (69,594 | ) |  |  | 21,093 |  |  |  | 82,593 |  |  |  | (57,280 | ) |  |  | 25,313 |
Total software |  | $ | 166,289 |  |  | $ | (139,836 | ) |  | $ | 26,453 |  |  | $ | 157,963 |  |  | $ | (125,437 | ) |  | $ | 32,526 |
The aggregate amortization related to software included in our operations for 2020, 2019, and 2018 was as follows (in thousands):
|  | 2020 |  |  | 2019 |  |  | 2018 |
Acquired software amortization (2) |  | $ | 1,853 |  |  | $ | 2,229 |  |  | $ | 1,801 |
Internal use software amortization (3) |  |  | 13,216 |  |  |  | 10,641 |  |  |  | 9,517 |
Total software amortization |  | $ | 15,069 |  |  | $ | 12,870 |  |  | $ | 11,318 |
| (2) | Acquired software represents software intangible assets acquired in our prior business acquisitions, which are amortized over their estimated useful lives ranging from four to eight years. The amortization of acquired software is reflected as a cost of revenue in our Income Statements.
| (3) | Internal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of the third-party software licenses. Internal use software is amortized over its estimated useful life ranging from one to ten years.
The remaining weighted-average amortization period of the software intangible assets as of December 31, 2020 was approximately 36 months. Based on the net carrying value of these intangible assets, the estimated amortization for each of the five succeeding fiscal years ending December 31 will be: 2021– $11.7 million; 2022 – $7.2 million; 2023 – $4.6 million; 2024 – $1.5 million; and 2025 – $0.9 million. Customer Contract Costs. As of December 31, 2020 and 2019, the carrying values of our customer contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):
|  | December 31, 2020 |  |  | December 31, 2019 |
|  | Gross |  |  |  |  |  |  |  |  |  |  | Gross |  |  |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Net |  |  | Carrying |  |  | Accumulated |  |  | Net |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Customer contract incentives (4) |  | $ | 4,626 |  |  | $ | (2,320 | ) |  | $ | 2,306 |  |  | $ | 4,626 |  |  | $ | (1,612 | ) |  | $ | 3,014 |
Capitalized costs (5) |  |  | 70,214 |  |  |  | (33,104 | ) |  |  | 37,110 |  |  |  | 68,085 |  |  |  | (26,482 | ) |  |  | 41,603 |
Capitalized commission fees (6) |  |  | 12,291 |  |  |  | (4,469 | ) |  |  | 7,822 |  |  |  | 9,561 |  |  |  | (3,432 | ) |  |  | 6,129 |
Total customer contact costs |  | $ | 87,131 |  |  | $ | (39,893 | ) |  | $ | 47,238 |  |  | $ | 82,272 |  |  | $ | (31,526 | ) |  | $ | 50,746 |
During 2020, we recorded an impairment charge of $10.3 million for the write-off of capitalized customer contract costs related to a discontinued project implementation. This non-cash impairment charge is primarily included in cost of revenue in our Income Statement. The aggregate amortization related to our customer contract costs included in our operations for 2020 and 2019 was as follows (in thousands):
|  | 2020 |  |  | 2019 |  |  | 2018 |
Customer contract incentives amortization (4) |  | $ | 708 |  |  | $ | 6,018 |  |  | $ | 11,052 |
Capitalized costs amortization (5) |  |  | 13,803 |  |  |  | 12,625 |  |  |  | 10,304 |
Capitalized commission fees amortization (6) |  |  | 2,679 |  |  |  | 2,136 |  |  |  | 2,025 |
Total customer contract costs amortization |  | $ | 17,190 |  |  | $ | 20,779 |  |  | $ | 23,381 |
| (4) | Customer contract incentives consist principally of incentives provided to new or existing customers to convert their customer accounts to, or retain their customer’s account on, our outsourced solutions and are amortized ratably over the contract period to include renewal periods, if applicable, which as of December 31, 2020, have termination dates that range from 2023 to 2025. The amortization of customer contract incentives is reflected as a reduction of revenue in our Income Statements.
| (5) | Capitalized costs are related to customer conversion/set-up activities and direct material costs to fulfill long-term cloud-based or managed services arrangements. These costs are amortized over the contract period, which as of December 31, 2020, range from 2021 to 2028, based on the transfer of goods or services to which the assets relate, and are included in cost of revenue in our Income Statements.
| (6) | Capitalized commission fees are incremental commissions paid as a result of obtaining a customer contract. These fees are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2020, range from 2021 to 2026, and are included in selling, general and administrative (“SG&A”) expenses in our Income Statements. Incremental commission fees incurred as a result of obtaining a customer contract are expensed when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less (a practical expedient allowed under ASC 606).

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- Definition The entire disclosure for intangible assets and long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 + Details
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